Best remedy for its maladies

Updated: 2012-11-26 08:03

By Wu Sike (China Daily)

To revitalize its economy and promote the global economic recovery the US should foster good relations with China

While people in the United States are wondering how President Barack Obama will revitalize their battered economy now he has been re-elected for a second term, people in China are wondering how he will handle ties with Beijing.

Why was China mentioned time and again as a reason for concern throughout the 2012 US presidential election? The answer can be found in the headaches that are plaguing the US today: a slow economic recovery and a high unemployment rate. While its economy has continually slowed since the outbreak of the global financial crisis, the US has seen its financial deficits rise more than $1 trillion, a figure that is keeping US business executives on pins and needles. Meanwhile, the US public has felt the sting of the country's high unemployment, as evidenced by several US polls during the presidential campaign that found economic issues and unemployment were the top concerns for 37 percent of respondents. Many people said they were worried about the impact of Chinese commodities on the US economy and feared China's overall development.

In US supermarkets, the shelves are filled with commodities from China. While enjoying these fruits of economic globalization many people in the US have come to worry about the contraction of domestic manufacturing. The US government has gone even further by initiating numerous anti-dumping cases against China.

But there is no reason to blindly demonize Chinese goods. It is a natural part of international trade for disputes to arise. But they should be settled through consultation, and never politicized. Following the global trade rules is a prerequisite for successful trade and cooperation between enterprises, and the World Trade Organization and other world bodies are competent enough to handle any disputes that might arise.

When it comes to matters of economic development, China's goal is to remain confident, be innovative, and seize new opportunities. Through its peaceful development, China, with a population of more than 1.3 billion, will surely propel global growth. While many developed countries continue to struggle in the mire of economic depression or social unrest, China has not only managed to keep its financial system sound and stable, but also registered annual GDP growth of more than 8 percent and maintained steady growth in its trade and investment that has enabled it to become the main engine powering the growth and recovery of the global economy.

China has also made efforts to spur domestic consumption and stabilize economic development. It has participated in multilateral financial rescue programs and accelerated the pace of economic activities in the US and Europe. It has also developed several proposals and joint-programs to combat the global financial crisis through resolute opposition to all forms of trade and investment protectionism.

As for its relationship with the US, China wants ties between the world's two largest economic powers to exemplify the principles of common development, prosperity, and security. As a major participant in, promoter of, and contributor to, international systems, China will surely play an increasingly important role in developing a world of lasting peace and harmony. The Obama administration should engage Sino-US relations from the perspective of benefiting the interests of both the US and Chinese peoples.

To effectively revitalize the US economy and foster good relations with China, the Obama administration should first reduce the US' colossal budget deficit and guide US finances onto the track of healthy development. It should also reverse perceptions that the US will continue to distance itself from China in terms of economic relations. By dampening the enthusiasm of Chinese enterprises, foreign investment in the US has decreased. Also, as its largest creditor, China holds $1.15 trillion in US treasury bonds. Thus, relations between the two nations will have a direct bearing on the performance of their economies.

Moreover, the Sino-US relationship is of immediate concern to the entire global economy. Therefore, President Obama should join hands with China's new leadership to explore opportunities that lay a solid foundation for the healthy development of Sino-US relations.

The author is a member of the Foreign Affairs Committee of the Chinese People's Political Consultative Conference and member of the Foreign Policy Advisory Committee of the Ministry of Foreign Affairs. www.chinafocus.com